Hayes Children Leasing Co. v. NCR Corp.

This is an appeal from an order denying a motion to compel arbitration.

Factual and Procedural Background

In October 1993, respondents Hayes Children Leasing Company (hereafter, Hayes Leasing) and Automatic Rain Company, Inc. (hereafter, Automatic Rain) filed an action against NCR Corporation and several of its employees, Gregory Peck, Jean Claude Littee and M. Ted Senemar (hereafter, unless otherwise indicated, all defendants will be referred to as NCR). The complaint alleged that Hayes Leasing and Automatic Rain, collectively, had entered into an agreement (the Universal Agreement) with NCR to purchase and/or lease a computer system for use by Automatic Rain to manage its business. It was further alleged, in essence, that NCR had falsely represented the capabilities and quality of the system, which false representations had induced Hayes Leasing and Automatic Rain to enter into the contract. Numerous problems later arose with respect to the performance of the system and with the services provided by NCR. NCR failed to disclose that other customers were having similar problems with like systems, instead asserting that the problems were the fault of Hayes Leasing and…